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The jobless generation: Europe

Sat, May 19, 2012, 01:00

The ‘Neets’ make up a fifth of Europe’s youth. Can they ride out the recession, asks MARY FITZGERALD

THEY ARE KNOWN as the Neets – not in employment, education or training – and they amount to just over a fifth of European youth.

The sliding scale of those under 25 who are jobless and not in education ranges from a high of 52 per cent in Greece to a low of just under 8 per cent in Germany. In between are Spain (51 per cent), Portugal (36 per cent) Italy (35 per cent) and Ireland (30 per cent). In France, Sweden and the UK, nearly a quarter of young people are in the same position.

Europe’s growing youth unemployment has caused alarm. “While, understandably, the recent focus of Eurozone policy has been on sovereign and financial crisis prevention, the economic and social consequences of high youth joblessness will soon warrant greater policy attention,” Larry Hatheway, of UBS Investment Bank, wrote in a recent memo.

The International Labour Organisation, which is part of the UN, has warned of a “scarred” generation facing a life of uncertainty marked by unemployment and inactivity. EU employment commissioner László Andor has said that “without decisive action at EU and national level” the crisis will create a “lost generation”.

Sony Kapoor, director of the Brussels-based think tank Re-Define, believes this would be disastrous given the demographic challenges of Europe’s declining birth rates coupled with increased longevity. “It’s the worst possible thing that could happen,” he says. “In countries like Greece and Spain, tomorrow looks worse than today, and if you are just entering working age it’s difficult to see any prospect or hope. It’s one thing having to make sacrifices while you see light at the end of the tunnel, but, as things stand now, one can only see an abyss.”

John Springford, an economics research fellow at the Centre for European Reform, warns that the nature of the crisis will have far-reaching effects.

“Even in good times the rate of youth unemployment is higher than for older people, but the time spent out of work is usually short. Now the rate is much higher, and young people are out of work for much longer periods. This means governments are burdened with a big unemployment- benefit bill in the short term. But it will also drag on Europe’s economy in the future . . .

“The evidence shows that people lose skills and motivation – and are more likely to succumb to depression, substance abuse and crime – the longer they are out of work. So they will be less productive, and there will be more government spending needed to tackle the social consequences.”

He argues that while the EU does recognise the problem, it doesn’t have the muscle to resolve it. “It has announced more money for training and job-guarantee schemes, but it’s tiny: €8.3 million. The commission can only try to persuade member states to act, as its budget is so small. And as member states are cutting budgets, with pressure from the EU to do so, it’s likely that unemployment will rise in the short term in countries in distress.”

So how to prevent Europe’s jobless youth from becoming discontented, disenfranchised and devoid of hope? “More investment in education is necessary – or, at least, the smallest cuts possible,” says Springford. “Then young people can ride out the recession and build skills for the future.” Some of the money could come from reducing spending “on things that don’t boost economic demand in the short-term, like pensions tax relief”.

Larry Hatheway says a more rounded approach is required. “Europe’s youth-unemployment challenge will be successfully met mostly by generating faster growth,” he says. “Skills enhancement and worker training can help, but the benefits from such policies are likely to be relatively modest.”

GREECE

Greece’s youth is bearing the brunt of joblessness, with youth unemployment more than twice as high as the overall figure of 21.7 per cent. The percentage of Greeks under 25 out of work is 51.2 per cent. Social welfare is paid only to those who were laid off after working a certain length of time, so most jobless young people receive no dole.

After tax and insurance deductions, young employees can now expect to bring home €400 a month. But some young Greeks take on even lower-paid work in the unofficial economy while remaining formally unemployed.

Nadia, who is 22, lives with her parents. A communications and marketing graduate, she finds herself back in a company where she did an internship, working in a position once occupied by a salaried employee. She still sees herself as unemployed.

“For the past three weeks, I’ve been working five days a week, more than eight hours a day, in a communications company. I’ve no contract, no insurance and have been told I’ll be paid €350 in cash a month. I don’t dare ask questions as I’ll be fired on the spot . . .

“I had to take the job; it’s important for me psychologically. I needed some daily routine. For months, I tried to sleep off the fact that I was unemployed and found myself getting up at noon . . .

“I should be discovering who I am and living my dreams. I can’t see that happening now. Most of my friends are in the same boat, and we’re now all talking about emigrating.” DAMIAN Mac CON ULADH

PORTUGAL

This week Portugal’s National Statistics Institute announced that the country’s youth unemployment rate had risen from 35.4 per cent to 36.1 per cent in the early part of this year.

One of the names behind that figure is Tiago Mourão. The 24-year-old studied painting at Lisbon’s fine-arts faculty and hoped to get a job in a gallery or museum. “It has been impossible,” he says.

To survive, Mourão lives with his parents and does whatever part-time work comes his way. “It’s just enough to cover the basics, but paying for things like going to the dentist is difficult.”

Most of his friends are also jobless and living at home; many others have become part of Portugal’s fuga de cerebros (brain drain) to other European countries or Brazil. “Most of them believe it is better to leave Portugal right now,” he says. “My friends are going to London and Berlin.”

It is shrinking horizons that Mourão and his friends wrestle with most. “There is a sense of your life being stopped.”

Portugal has not seen the kind of youth- powered protests that have erupted in Greece and Spain; Mourão doesn’t expect unrest in the future. “People in Portugal seem to accept the situation. We are upset, but we also feel there is not much we can do about it. Instead of getting angry, like in Greece, it is better to try to stay positive and create something we can hold on to, such as art, cultural events and music, to express ourselves.” MARY FITZGERALD

ITALY

If you want to understand the youth- unemployment problem in Italy, there is no need to consult the latest OECD report. Just talk to students on any university campus: one in four wants to emigrate.

The global crisis has exacerbated an already chronic problem in Italy. The lack of meritocracy in Italian society, low investment in education, and 20 years of economic stagnation long ago rendered the position of “youth” extremely discouraging.

While OECD figures for 2012 show a 22-23 per cent unemployment rate for the under-25s, youth unemployment is at least 35 per cent, if not higher.

Will one in four emigrate? Not necessarily. Few young Italians have proficiency in a foreign language, the result of abysmally inadequate secondary-school language teaching.

Fabio, a 24-year-old barman in central Rome, considers himself lucky. He has a job (his mother runs the bar), but he says three out of four of his friends say they intend to emigrate in search of work.

“That’s what people say, but when they head off, and they find themselves immediately in difficulty with the language, many of them just give up. In fact, I think lots of my friends are just talking about emigration; in the end, they will stay at home, because they have no alternative.” PADDY AGNEW

NETHERLANDS

On paper, the Netherlands has hardly been touched by the economic downturn, with the lowest rate of unemployment in the EU, at 5.9 per cent, and the second-lowest rate of youth unemployment, at 9.3 per cent – but in reality both figures are much higher than they seem.

In the first quarter of 2011, youth unemployment was also the lowest in the EU, at 7.4 per cent, though in the past 12 months it’s climbed slightly.

But there are “hidden jobless”, students who’ve emerged from university ready to join the workforce but, unable to find jobs, have begun postgraduate degrees.

“I certainly would have taken a job if there was any prospect of getting one when I left university last year,” says “Meike”, who is 23. “But absolutely nobody was recruiting. The message was to try again next year – but who knows what’s going to happen?”

Meike graduated with a law degree from blue-chip Leiden University and would normally have walked into an established law practice as a junior, but after searching for an opening she decided to bide her time by doing a master’s degree.

“My parents are helping me, and I know parents everywhere are doing the same thing. But that can’t go on forever.” PETER CLUSKEY

SPAIN

Youth unemployment in Spain is often said to be underestimated. In crises, Spain’s large middle class takes its adult children under protection, with parents paying for eternally continued studies. This practice continues, but parents, often now losing their own jobs, are struggling to stay afloat.

Youth unemployment is at 52 per cent, more than double the already grim national average of 24 per cent. Worse, young people are losing jobs at a rate five times faster than their older peers. The most many youths can hope for is un mini-job – part-time work.

Unsurprisingly, young people have swollen the ranks of the angry but largely peaceful street protests in Spanish cities.

Cesar Pastor, a 23-year-old from Vitoria, marched with them, but he is underwhelmed. “They complain, complain, complain,” he says. “But they do not actually do anything.”

Pastor left school at 16 with nothing more than a devotion to music, especially rap, that has earned him only pocket money. He has never had a steady job, but he has done delivery work for a pharmacy, as well as sales and plumbing work – although not since last September.

He has decided to finish his secondary education next year. His divorced mother will pay his fees. PADDY WOODWORTH

FRANCE

Brahim Achatib always thought that if he ever worked abroad, it would be by choice. Now, a year after graduating with a master’s in business, the 26-year-old feels he has no alternative.

Achatib, from Picardy, in northern France, has the sort of CV that once guaranteed work. He has a degree, a postgraduate course in marketing and good English, and he has done a number of internships. But after about 50 job interviews, the search goes on. “You do your best to stay motivated, but it comes to a point when you say to yourself, it’s not possible,” he says.

Some of his friends have already left for Australia, Canada and the Middle East; his experience is increasingly common in France. Unemployment is just below 10 per cent on average but 21.6 per cent among 18- to 25-year-olds. Chronic youth unemployment is a major political issue and was a key theme of President François Hollande’s election campaign.

Achatib is an optimist by nature. “It’s difficult, but if you weren’t motivated, you’d just stay at home and cry,” he says. “I’ve faced bigger challenges in my life, so I say to myself that an opportunity will come along eventually.” Yet he also feels anger – first towards the big companies that refuse to take a chance on youth, then towards the politicians “who haven’t done much at all for young people”. RUADHÁN Mac CORMAIC

UK

Enter any Pret A Manger sandwich shop in metropolitan Britain and you’ll find numerous young foreigners working enthusiastically. The image features frequently in discussions about youth unemployment: why aren’t young British people getting such jobs?

In 2006, 668,000 16- to 24-year-olds were unemployed. By last winter, the number had risen to over a million, with the number of black youths without work nearly doubling.

Excluding students, the current level of youth unemployment stands at 731,000, the highest since the start of 1994 but lower than the peaks after the recessions of the 1980s and 1990s.

Education determines future in Britain, as elsewhere, even if it does not mean qualifications necessarily offer early success. In 2011, a quarter of those who left school without basic GCSEs were unemployed, as were 20 per cent of 18-year-olds with A levels and 25 per cent of 21-year-olds with recent degrees.

Most of their older fellows with the same spread of qualifications had settled into work by the time they had reached their 24th birthdays. By then, 13 per cent of those with only GCSEs were unemployed, compared with 7 per cent of those who had left education with A levels and 5 per cent of those with degrees. MARK HENNESSY

GERMANY

While its European neighbours battle record youth unemployment Germany’s problem is the opposite: it hasn’t enough young people to satisfy its booming economy.

In the EU youth unemployment statistics, Germany stands out with a jobless rate of just 7.9 per cent.

Demographics plays a role: there are fewer young people to fill growing number of jobs. But the most important factor in Germany’s low jobless rate is its vocational training model.

Where other countries produce masses of graduates – often more than their labour markets can handle – German university-leavers have always been a minority of their age group. More than half of German school-leavers study part-time at vocational college and work three days a week as apprentices.

Chancellor Angela Merkel never tires of underlining this as a key to Germany’s economic success. Countries with a similar model – the Netherlands, Austria and Switzerland – are clustered at the bottom of the Europe’s youth-unemployment table.

The model obliges companies to shape the training and final exams, ensuring what apprentices learn is relevant to the workplace.

“Irish companies need to get away from the idea of buying in training courses; they need to get involved in shaping the training themselves,” says Ralf Lissek, president of the German-Irish Chamber of Industry and Commerce. Adapting the vocational model across Europe could, he says, help address youth unemployment.

For now, the best prescription against youth unemployment in Europe is to learn German and come to Germany. DEREK SCALLY